Toyota has raised its profit forecast for the year and promised shareholders up to ¥14 trillion, about $89 billion, over the next five years. Hybrids did much of the work: higher fuel prices after the Iran war pushed more buyers towards Toyota’s petrol-electric cars, helping the world’s biggest carmaker post its first first-half profit rise in three years.
The results, published in Tokyo on Thursday 5 November, sent Toyota’s shares up 17% on the day, their biggest one-day gain in almost 40 years, according to Reuters.
The headline numbers
For the six months from April to September 2026, Toyota reported:
- Net profit: ¥2,236.4 billion, up 26.1% year on year.
- Revenue: ¥26,962.4 billion, up 9.5%, the sixth straight rise for this half-year period.
- Operating profit: ¥2,191.1 billion, up 9.2%.
The July–September quarter alone was stronger still, with operating income up 34% and ahead of analysts’ forecasts, Reuters reported.
Toyota now expects operating profit of ¥3.9 trillion for the financial year ending in March 2027, up from ¥3.4 trillion in its previous forecast, and net profit of ¥3.57 trillion instead of ¥3.25 trillion. It trimmed its revenue forecast slightly, to ¥53.5 trillion from ¥54 trillion.
Hybrids, the yen and lower US tariffs
Three things lifted the outlook. Demand for hybrids was strong as fuel costs climbed after the war in the region disrupted oil supplies. A weaker yen boosted the value of overseas earnings. And a smaller hit from US tariffs helped Toyota’s North American business return to profit.
Executive vice president Yoichi Miyazaki said the company had stopped losing ground in the United States, its biggest market. “We’ve been able to halt the decline in our market share and are now starting to regain some ground,” he said.
Not everything went Toyota’s way. Global retail sales fell 4.6% to 5.38 million vehicles in the half, a figure that includes Daihatsu and reflects the removal of Hino from the group’s accounts. Sales in China slid as high fuel prices hit consumer confidence there. Raw materials cost Toyota an extra ¥465 billion, a rise partly linked to the situation in the Middle East. In a statement, Toyota said it had “mitigated the impact of rising materials prices and production disruptions caused by earthquakes and floods”.
“We were able to limit the impact of changes in the external environment,” said Takanori Azuma, Toyota’s chief accounting officer.
An $89 billion promise to shareholders
The bigger surprise was the capital plan. Toyota said it would return up to ¥14 trillion to shareholders by March 2031, double the ¥7 trillion it returned over the past five years. The company is sitting on a cash pile of about ¥9.5 trillion and plans to cut its net liquid assets to ¥7 trillion over the period.
At the same time, it will invest at least ¥22 trillion in research, development and capital spending through the 2030 financial year, and it plans to build a robotics business that will supply other manufacturers and industries.
“It was a decent quarter. There are some automakers so far that have been reporting they had terrible quarters,” said Christopher Richter, autos analyst at Citic Securities Japan. On the guidance upgrade and shareholder payouts, he added: “it’s like, ‘wow’.”
Why it matters in the Gulf
Toyota is one of the pillars of the Gulf car market, sold through Abdul Latif Jameel in Saudi Arabia and Al-Futtaim in the UAE, and its Land Cruiser, Hilux, Camry and Prado are fixtures on the region’s roads. A stronger Toyota means more money for new models and for the hybrid technology that Gulf buyers are now taking more seriously as fuel prices rise.
That shift is visible in the UAE, where pump prices are reset every month in line with global energy markets. Special 95 petrol passed AED 4 a litre in October before a partial cut for November, the first reduction after three straight monthly increases.
Toyota also faces a different kind of pressure in the region: Chinese brands. Carmakers such as Jetour, Haval, BYD and Chery have taken a growing share of Gulf showrooms with cheaper hybrids and electric cars. Toyota’s answer so far has been to expand its hybrid range and refresh its off-road icons, including the new Land Cruiser FJ, the compact Land Cruiser that went on sale in Japan in May.
The bottom line
Toyota went into 2026 under pressure from US tariffs, a slumping Chinese market and a raw-materials shock tied to the Middle East. Halfway through its financial year, it is earning more, guiding higher and handing more cash back to investors. For Gulf customers, the message is that one of the region’s best-known brands is betting even harder on hybrids, the technology that suits a market where petrol is no longer as cheap as it used to be.
Sources: Toyota Global Newsroom, Reuters via BusinessDay, Nation Thailand, AFP via Gulf Today, YallaMotor.